78TH CONGRESS HOUSE OF REPRESENTATIVES 2d Session { REPORT No. 1591 FOREIGN ECONOMIC ADMINISTRATION APPROPRIATION BILL, 1945-INCLUDING DEFENSE AID (LEND-LEASE) AND PARTICIPATION BY THE UNITED STATES IN THE UNITED NATIONS RELIEF AND REHABILITATION ADMINISTRATION JUNE 2, 1944.-Committed to the Committee of the Whole House on the state of the Union and ordered to be printed Mr. CANNON of Missouri, from the Committee on Appropriations, submitted the following REPORT [To accompany H. R. 4937] The Committee on Appropriations submits the following report in explanation of the bill entitled "A bill making appropriations. for defense aid (lend-lease), for the participation by the United States in the work of the United Nations Relief and Rehabilitation Administration, and for the Foreign Economic Administration, for the fiscal year ending June 30, 1945, and for other purposes." SCOPE OF THE BILL The funds carried in the bill are necessary for the continuance of the foreign economic operations of this Government, responsibility for which is now centralized in the Foreign Economic Administration. They are needed to procure lend-lease supplies and services to enable the other United Nations to carry out most effectively their part of the war effort and also to procure supplies and services as the United States contribution to United Nations Relief and Rehabilitation Administration, the international agency which has been formed to relieve the suffering of the peoples liberated from enemy control. In addition to the funds for supplies and services, administrative sums carried are for the lend-lease and United Nations Relief and Rehabilitation Administration programs and to enable the Foreign Economic Administration to undertake the economic warfare and analysis work which is aiding in the destruction of the enemy's economy, in procuring strategic and critical materials for war production, and in controlling the export of commodities which might otherwise fall into enemy hands or which must be conserved for our own war industries. The bill is divided into three titles Title I, to carry out the provisions of an act to promote the defense of the United States, approved March 11, 1941, as amended (LendLease Act). Title II, to carry out the provisions of an act to enable the United States to participate in the work of the United Nations Relief and Rehabilitation Administration, approved March 28, 1944. Title III, to provide for the salaries and other administrative expenses of the Foreign Economic Administration, including the expenses of administration of the Export-Import Bank of Washington payable from funds of the bank. APPROPRIATIONS AND ESTIMATES The Budget estimates upon which the bill is based were transmitted by the President in House Document No. 566 on May 3, 1944, and House Document No. 572, on May 8, 1944 The aggregate of the Budget estimates, the amounts recommended by the committee, the amount of the 1944 appropriations, and the comparison of the bill with the Budget estimates and the current appropriations, are as follows: 1 Plus use of $3,879,225,000 of unobligated balances existing on June 30, 1943. 2 Plus use of $3,650,024,000 of unobligated balances estimated to exist on June 30, 1944, and $88,299,000 received under sec. 6 (b) of the Lend-Lease Act. Plus use of not to exceed $350,000,000 of funds appropriated for lend-lease contingent upon their not being needed for lend-lease purposes. Payable from funds of the banking corporation. The foregoing table shows the following data with respect to new appropriations and the use of unobligated balances carried forward: The amount of new appropriation carried in the bill is $3,450,570,000 for the fiscal year 1945. Unobligated lend-lease funds from previous appropriations to the President are estimated to be $3,650,024,000 as of June 30, 1944. An additional $88,299,000 has been received under sec. 6 (b) through operations of the Lend-Lease Act as of March 31, 1944. These sums are also made available for lend-lease purposes during fiscal year 1945, making a total availability of $7,188,893,000. The amount of the new and direct appropriation, $3,450,570,000, is comparable with the direct appropriation for the present fiscal year, $6,273,629,000, and is a decrease of $2,823,059,000. The total of funds to be available for obligation in fiscal 1945, $7,188,893,000, is comparable with the amount estimated to be obligated in the current fiscal year, $6,287,957,846, an increase in estimated obligations in fiscal 1945 over fiscal 1944 of $900,935,154. Larger obligational requirements for the fiscal year 1945 are based upon the tempo of the war and the availability of shipping facilities. The sum of $7,188,893,000 was determined after a calculation of the total amount of material that lend-lease countries need and that we could furnish, and then reducing that total by $347,000,000 to accord with the present rate of obligation which is approximately $550,000,000 per month, or at the rate of $6,600,000,000 a year; the difference between this rate and the $7,188,893,000 recommended to be available is represented by the $566,000,000 of special guaranty and revolving funds which are not currently being obligated and are carried forward for 1945. The carry-over balance from 1944 of $3,650,024,000 arises from a number of causes. Approximately $1,000,000,000 is accounted for by the cancelation of some military contracts, and from reductions, savings, and renegotiation involving funds directly granted to the President, $566,000,000 is represented by guaranty and revolving funds reserved under previous appropriations which have not been expended, and the remainder is due to inability to get the articles in the quantities and at the times estimated. The special funds which are appropriated, $88,299,000, consist of those accruing under section 6 (b) of the Lend-Lease Act and are receipts from foreign governments in payment for certain lend-lease supplies furnished for cash, receipts from the sale of reverse lend-lease commodities which foreign governments have furnished us in addition to the aid they have furnished our armed forces under reverse lend-lease, and proceeds from the salvage of lend-lease cargoes on damaged vessels. A list of the amounts is found on page 27 of the hearings, the principal sum being $62,275,979.04 of payments on account of French North and West Africa. The amount in the bill does not include funds for ordnance and ordnance stores, aircraft, tanks, military vehicles, naval vessels, and other finished munitions, since transfer authorization for such items has been provided in appropriations made directly to the War and Navy Departments. There is no duplication between the lend-lease programs of the War and Navy Departments and the items included in the lend-lease program of the Foreign Economic Administration. LEND-LEASE POLICY AND OPERATION By the enactment of Public Law 304, approved May 17, 1944, Congress for the third time has given lend-lease its approval as an essential part of our machinery for waging war. The extension of the Lend-Lease Act was a necessity. The appropriation of adequate funds for effectuating the objectives of the act is equally essential. The materials and equipment which will be provided under this bill will enable the United Nations to fight with maximum effectiveness in our joint effort to defeat the enemy. Every implement of war that our allies make from the raw materials we send them and they man with their own fighting power adds further strength to the combined United Nations forces. The committee regards the appropriations for lend-lease as a sound investment by the United States in a United Nations victory. Military events since the passage of the Lend-Lease Act have demonstrated again and again that through the lend-lease and mutual aid programs of the United Nations the military power of the United States and its allies has been greatly augmented. The American forces participating in combined operations with our allies have also been strengthened by the more than $2,000,000,000 worth of supplies and services which we have received as reverse lendlease. The decisive battles of the war are still ahead and the greater our combined striking power, the more assurance there will be that the war will be brought to a speedy and successful conclusion. The total amount of lend-lease aid which has been furnished from the time of the passage of the Lend-Lease Act on March 11, 1941, to March 31, 1944, is $24,225,000,000. In addition, $591,000,000 of sup |